چکیده انگلیسی

Project portfolio management (PPM) is a commonly employed technique to align a project portfolio with strategic goals. Prior research has mainly regarded PPM as a methodology to optimize the overall benefit of a project portfolio. While adequate project selection techniques are certainly important, we argue that successful PPM – and consequently effective strategy implementation – depends on an organization's structural alignment with the needs of PPM. Based on three cases in the German construction industry, we study the effects of fundamental strategic changes on the project selection and organizational structure. From our case analysis, we develop a substantive theory to explain how the criteria, used by a company to choose and evaluate its projects, influence the company's structure through the information requirements created by such criteria. To assess whether our theory is in line with accepted schools of thought on organizational design, we integrate it with existing organizational theories. Our contribution is twofold. First, we offer a substantive theory that integrates strategy implementation, organizational information processing, and structural adaptation. Second, we introduce a new antecedent of successful PPM, namely structural alignment, thus introducing a new perspective on PPM beyond mere project selection techniques.

مقدمه انگلیسی

When Philipp Holzmann AG, which had long been Germany's largest construction company, filed for insolvency in 1999, the public was shocked. While government intervention was able to delay its eventual demise to 2002, it became apparent that, owing to a lack of communication between headquarters and business units as well as insufficient risk management, Philipp Holzmann AG had accepted risky projects far beyond its means (Dahlkamp and Reuter, 1999).
The case of Philipp Holzmann AG shows that selecting the right projects is crucial for the success of project-based business models (Müller et al., 2008). Available project alternatives usually far exceed the number of projects that can be executed with an organization's limited resources at any given time, and choosing the right projects in a particular context is seldom easy (Engwall and Jerbrant, 2003). Therefore, academics and practitioners alike have sought to develop methods to address the project selection problem. One prominent approach is project portfolio management (PPM), which is used to keep the ratio between existing and new projects as close to an optimal state as possible (Archer and Ghasemzadeh, 1999). While financial criteria play a significant role in defining the optimal state, strategic intentions are also important (Englund and Graham, 1999). The strategic aspect of project portfolio management has seen increasing interest in research, and there is now ample literature on the connections between project portfolios and business strategies (Artto, 2001 and Morris and Jamieson, 2005).
However, most literature takes a somewhat methodological perspective on PPM, focusing on algorithms for optimizing portfolios and the general effectiveness of PPM approaches (e.g., Doerner et al., 2006 and Henriksen and Traynor, 1999). PPM is seen as a planning and controlling approach looked after mostly by project management offices or dedicated role-players in the project organization (e.g., Archer and Ghasemzadeh, 1999 and Müller et al., 2008). However, while this perspective has seen much attention, we are not aware of any research into the organizational transformations necessary to implement a strategic project portfolio management regime. This is unfortunate, because organizational alignment and the ability to collect pertinent information from all organizational units is often more important to PPM success than employing sophisticated project prioritization methods or information systems (Kerzner, 2004). Indeed, the lack of research into the organizational impact of strategy implementation is not limited to project-based organizations but is a general blind spot in strategy research (Noble, 1999), even though practitioners often see strategy implementation as more risky and difficult than strategy formulation (Hrebiniak, 2006).
In our research, we study organizational alignment as an antecedent to successful PPM, using case studies in the German construction industry. Construction contractors are a typical example of project-based companies. Since their core business is the execution of construction projects, strategies must be implemented by changing how projects are selected and managed (Langford and Male, 2001). From the empirical data we gathered at three large construction firms, we derive a substantive theory of the relationships between strategy, project portfolio management, and the organizational alignment prompted by strategic PPM implementation. The resulting theory will be integrated with theories of organizational information processing (Galbraith, 1973) and contingency theory (Donaldson, 2006 and Hofer, 1975) to interpret the results in the context of a more general theoretical framework.
The paper is structured as follows. After the Introduction, we examine the state of strategic management with a focus on the construction industry and also provide an overview of the concept of project portfolio management. We then present our research method. We illustrate our findings in the context of a short description of the current state of German construction. In the next section, we explain the substantive theory we have developed and embed it in broader theories of strategic alignment. In conclusion, we point out our study's limitations and outline future research opportunities.

نتیجه گیری انگلیسی

In this paper, we presented the results of an investigation into the structural changes induced by strategy implementation using project portfolio management. We believe that the described findings generally apply to project-based business models. However, since our study is limited to construction contractors, there is still a need for research in other industries (besides construction) to establish the findings' validity. For this purpose, it would be fruitful to conduct a quantitative study that relates the choice of strategic configurations with information requirements, and tests the co-occurrence of these requirements with corresponding organizational structures. Because several quantitative studies have successfully operationalized information requirements, we are confident that such a study would not only validate our theory, but would also yield further insights into the dynamics of OIP in a project management context (Egelhoff, 1982 and Leifer and Mills, 1996).
Our study's theoretical contribution is twofold. First, it lies in the integration of strategy implementation, organizational information processing, and structural adaption. While information processing has been used as paradigm to study the fit between strategy content and organization (Egelhoff, 1982 and Rogers et al., 1999), as well as to shed light on organizational fit with environmental contingencies (Daft and Lengel, 1986 and Kleinschmidt et al., 2010), our study is to our best knowledge the first to explain the link between strategy implementation and organizational structure using an OIP perspective. Since the ability to adequately procure and process information is not only important for strategy formulation and strategy implementation (Hrebiniak, 2006), it stands to reason that organizations aligned with the information requirements of strategy implementation are more efficient and/or more agile in implementing new strategies. Second, our study establishes a new perspective on PPM, broadening the narrow focus of methodological approaches. We have shown that a major antecedent of successful PPM is structural alignment. PPM's implementation in project-based organizations is thus not merely a matter of defining project selection techniques, but – rather – it shapes the organizational structure as a whole. This paper's primary contribution is therefore a new perspective on the requirements of PPM implementations and strategy implementation with PPM. Many organizations still struggle to set up an effective and efficient multi-project environment (Elonen and Artto, 2003 and Engwall and Jerbrant, 2003). Using an information requirement approach enables practitioners to analyze the organizational impact of comprehensively introducing PPM. While some literature on PPM acknowledges the importance of accompanying organizational measures, such as the centralization of resource management or a central PMO, it provides no guidance on their relative importance and how much effort should be invested in these measures in the particular context of any organization. Using strategic information requirements as the point of departure for PPM design, organizations ought to be able to establish a close link between the strategy and project portfolio management processes, and ought to be able to successfully implement strategies.